Effective sales consultants invest much time and effort into developing and nurturing their sales leads and customers. The very nature of their job description renders this group competitive and somewhat territorial. The variety of systems and approaches they use to uncover, store and recall information on customers and prospects is almost as broad as their sales styles.
Many companies take a hands-on approach to managing sales data by systematizing sales practices and processes to ensure consistency in the capture and storing of customer information. This helps ensure that information is available across the organization for use in strategy and growth planning.
Others are happy to leave the sales department to its own devices for capturing this information. Management is not as concerned with the details of the customer relationships as it is with overall performance and the bottom line.
When your corporate CRM practices and those of your individual sales consultants are not in sync, what do you do? This issue's dilemma asks: How do help sales consultants preserve and protect their customer relationships while ensuring valuable customer information enters your database?
Outside your territory on this issue? Let us know what keeps you up at night. What dilemma do you take with you when you leave the office? Your peers would love to help. Write to us and ask our SWOT Team about your dilemma. Tap into the collective strength, wisdom and experience of this group. It works, and you could win a free copy of our book, A Marketer's Guide to e-Newsletter Publishing.
Revisit our previous dilemma—read below for your peers' best advice on localizing a global brand.
Unite and make a difference!
• Give advice about this issue's dilemma.
• Read your peers' responses to the previous dilemma (below).
• Submit your own dilemma.
This Issue's Dilemma
SWOT Category: Internal Weakness
Help! Our territorial sales practices have gone too far.
For the last five years, we have used relatively low-maintenance, yet highly territorial sales practices. We have always allowed our sales consultants to manage their leads, customers and related customer data in their own way. They have never been required to share information internally. After attending a recent seminar, we realized just how much valuable information we were letting walk out the door every night, and decided to implement a company-wide CRM program.
We consulted with our staff throughout the CRM selection process and invested heavily in training. Six months later, our CRM is being underutilized, and we have run into a great deal of resistance from our sales veterans. How do we reduce their fears and persuade them to use the new system, without affecting morale or losing our star performers?
—Anonymous, Sales Manager
Previous Dilemma
SWOT Category: Internal Weakness
How do we know when it's time to grow?
My partner and I started a small technology business three years ago. My partner focuses on developing the technology and supporting our clients, while I focus on business development, marketing and sales. Bootstrapping a business has taught us to be very frugal. To keep costs down, we have always opted to hire junior staff to help with things like accounting, office administration and reception, site maintenance etc. After three years of steady growth, we're considering bolstering our sales force.
The question is, Do we continue with our junior hiring strategy? Or do we look for more experienced salespeople who can close the deals? By hiring junior reps, we can continue to fund our sales operation without taking on additional debt or financing. On the other hand, hiring more experienced professionals would likely require additional funding or debt, but would accelerate our growth. How do we compare the investment in growth and increased sales potential versus the risk of acquiring funding?
—Anonymous, Technology Software Partner
Summary of Advice Received
Anonymous, being on the edge of a growth spurt can be both exciting and nerve-racking. Your dilemma raises a number of questions about the success of your current sales program.
What is it that makes your sales program effective? Have your sales practices been defined and documented? Do they bring measurable and consistent results? Can your sales practices be taught to and duplicated by a new salesperson? Or have you relied on your experience and sales savvy to close the deals? Taking the time to consider the answers to these questions may help to narrow your decision-making options.
SWOT Team members offer the following advice including guidelines for making this strategic decision, as well as tactical programs you can implement in the short-term, to decrease your financial risk and focus on growth. Here's what your peers had to say:
1. Use sales forecasts to assess the risk.
2. Develop your lead-generation program first.
3. Use a team of senior and junior representatives.
4. Subcontract for the expertise you need.
5. Try partnering with a complementary provider.
1. Use sales forecasts to assess the risk
Conducting an objective review of your sales efforts and performance to date can assist you in weighing opportunity versus risk. If you are able to reasonably forecast sales, you will have a basis for assessing the financial opportunity available by hiring a sales force.
Kuldeep Singh, sales and marketing manager for Samtel India Ltd., offers this guideline for gauging business versus financial risk:
At a macro level, you have to consider the business risk versus your financial risk. If the business is assured (i.e., your sales program consistently performs at or above forecasted levels), building your business through increased debt may be viable, as long as the return to your business outweighs the cost of financing. If the business risk is greater than your financial risk, equity financing may make more sense.
2. Develop your lead-generation program first
Depending on the current level of development in your existing sales program, a new salesperson may or may not be able to duplicate your results. Ensure that you have a basic program in place that is tested and consistently generates leads for the company.
Randall Hicks, division manager (The MIT Group) for PCT Engineered Systems, LLC, offers two reality checks on making the hiring decision:
1. Do not assume that hiring an experienced sales professional will accelerate your growth, unless you have all the collateral marketing materials and lead generation in place that an experienced salesman would expect in order to sell effectively.
2. If you don't have marketing materials and lead generation in place, spend your money there first. This can be done through outsourcing with a reputable marketing firm. When your leads become unmanageable, look to a salesman on staff to mine the leads for potential closes. Additionally, pay your salesman a low base, but high commission, to make him work for his money. Get comfortable with that fact that your salesperson may become your highest-paid employee.
3. Use a team of senior and junior representatives
Stretching your budget and maximizing your sales potential may allow for a combination of senior and junior salespeople. As suggested, using a lower-base salary and higher-commission structure to keep your team motivated and performing while minimizing your financial risk can make this possible.
Naomi Thompson notes that a combination of senior and junior representatives can be used to balance the workload, manage the sales cycle and effectively grow the business:
I work for a company of less than 100 employees, with sales under $10 million and a sales staff of six. The owners are entrepreneurs who started from ground zero. (With an idea and a nickel, you know the sort).
Their philosophy was, “When we're growing, add more sales.” This was always a combination of senior and junior sales—senior to make the deals, junior to support the seniors. I think you may be looking at this as an A or B type answer when the answer really is C!
P.S. Investment in growth vs. risk analysis is best left to your statisticians. Maybe it's time to procure a report on the overall market share available? Opinion alone can never combat numbers.
4. Subcontract for the expertise you need
In the early stages of a growth phase, it may not be necessary to own all of the skills and expertise you will need to deliver your products and services to the market.
M. Barber offers this perspective on subcontracting the skills you need until your sales program is on firm ground:
I'm wondering if you've locked your thinking into “owning” the skill set rather that having “access” to the skill set? In other words, do you NEED to hire someone? Can you find someone with the advanced skill sets you need that is willing to subcontract their skills to you? If so, this would allow you to test the waters by accelerating growth rates while giving you the flexibility to pull back if the growth rates diminish. Consider a tech-savvy early retiree looking for a bit of work to keep their mind sharp or some young hotshot that has just gone out on his or her own, looking to pick up some clients. This will give your business more options and choices for the future.
Even though hiring might seem the ideal way to go, I'd consider other options that give you access to the skill sets you need. Subcontracting or outsourcing the sales function might be a useful way to go. Keep in mind, you should provide ALL training for these staff to ensure they fully understand your product offerings and your market. Also make sure that your subcontractor agreement covers things like ownership of contacts, database, product lines, etc.
5. Partner with a complementary provider
Another option is to leverage the sales expertise and human capital of another company. Look for a complementary partner who is currently reaching your target market. This will also help reduce your fixed costs, as most partners will agree to work on the basis of commission on sales.
One SWOT Team member offers this advice on how to establish an effective partnering relationship:
Look for vendors to represent your product/solution. They will already have everything in place to market and sell for you, and may also have existing relationships with firms that specialize in implementing (integrating) their products. If successful, you could spend more time focusing on improving your product while your partner focuses on reaching the market.
M. Barber points out additional factors that can help you identify potential partners:
See if you can identify a business that targets the same clients as you, but with non-competitive products. Work out a deal with them to leverage their existing sales force to sell your products in addition to their own. If they have an industry with tight margins, they'll love the opportunity for a product growth category—maybe you can pay them 12-15% of a sale value? This way you won't need an internal sales force and can leverage your partner's experienced sales force.
Excellent suggestions for managing growth, SWOT Team—thanks again!
We did our best to provide a thorough overview of your responses to this timely topic. All of the advice we received was insightful. Thanks for your participation. We appreciate it!
